Best Bits from Last Week

Bitcoin Price Outlook: Bullish

Price Recap

The Memorial Day holiday weekend in the US was positive for the bitcoin market, offering traders an opportunity to close positions built over the past two weeks. The past week’s mini bull run drove the market up over 5% off of the two-week low of $229 last Monday.

If you were able to buy around the support level of $235 given two weeks ago in the 5/11 edition of Lifting the Offer, you went into the holiday weekend with a solid 3%+ gain along with some dry powder to play with going forward. Those who pressed their bets until Sunday were able to gain an additional percent before the market corrected.

The Week Ahead

In the short-term, traders can find updated support and resistance at $235 and $245, respectively. This band gives traders ample space to play as the market continues to locate its long-term direction. At the moment, the long-term trend is positive as the market appears to have fully recovered from the sell off in early-April.

Summer Volumes are Almost Here...

The summer historically brings lower trading volumes across many major asset classes including equities, FX, fixed income and commodities. Bitcoin is no exception and traders should prepare accordingly for this shift.

In 2013, average monthly summer trading volumes (June through August) dropped over 46% compared to the average volume in April and May. The dropoff in 2014 was less severe with the summer trading volume dropping around 35% over the same timeframe.

Bobby Cho is the Director of the Institutional Client Group at itBit. Previously, Bobby was Vice President of Trading at SecondMarket specializing in trading bitcoin and illiquid asset-backed securities.

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